Nadia Calviños, The Spanish Minister for the economy, and Ada Colau, the Mayoress of Barcelona, have been trading blows in the Spanish press on the question of rent controls as prices explode and contracts decline in the Catalan capital.
To give you a bit of background to this spat, the Spanish government – a coalition of Socialists (centre-left) and Podemos (hard-left) – cannot agree on a new housing law that is almost a year late, and rent-controls are one of the big sticking points. Podemos wants rent-controls nationwide, which the Socialists are resisting. With municipal elections around the corner in May, Barcelona Mayoress Ada Colau is both electioneering, and putting pressure on the Socialists to bend the knee to Podemos.
The first shot in this spat was fired by Ada Colau, the Mayoress of Barcelona, a former squatter and housing-rights activist from the hard-left of Spanish politics, who used the inauguration of the Mobile World Congress show in Barcelona to urge the Spanish president, Pedro Sánchez, to introduce rent controls because rising rents “are a big barrier to social cohesion and prevent many young and talented people from staying in the city.”
The Socialist response came from Nadia Calviño, Vice-president and Economy Minister, who suggested that Colau might be trying to distract attention from her failure to deliver on the housing front in Barcelona, which is her signature issue. “I don’t know if [Colau] is trying to dodge the issue, trying to find someone else to blame for her management of housing policy in Barcelona since 2015,” said Calviño in a TV interview.
Calviño went on to pour cold water on the 3% rent-control limit called for by Podemos. “I don’t believe that any citizen thinks that all the difficulties we have in the framework of housing will be solved by putting a slogan in the law,” she said. “I think that what citizens want from us is that we don’t offer facile populist messages that don’t solve problems.” She then clarified that the 2% inflation-cap on rents passed by her government last year, arguably a facile populist measure, was just an “absolutely extraordinary” measure in response to high-inflation until the end of 2023.
Colau didn’t waste any time in responding, and made it personal. “Calviño is the most neoliberal wing of the current government and she has always been against putting limits on housing speculation,” she told the press. “But I’d like to remind you that Sánchez is the President and five years ago, right here, he promised to introduce a cap on abusive rents. Let him show that he’s the President and not Calviño,” whom she also accused of acting in “bad faith” and “showing little sensitivity” towards the problem of housing access.
On her own visit to the Mobile World Congress show in Barcelona, Calviño defended the government’s record on housing policy, saying it reinforces “the protection of tenants and of instruments for autonomous regions and town halls, and also over the control of tourist rentals,” whilst the pending housing bill “includes important improvements” that will make housing access better for the most vulnerable people and young adults.
Calviño is the Spanish minister responsible for economic policy, and, unlike Colau, seems to understand economic laws, which is why the hard-left delight in calling her a “neoliberal”. Unless her government introduces rent-controls around Spain, Colau won’t be able to reintroduce them back in Barcelona, where a new report says they failed the last time she tried them. But with municipal elections round the corner, and rental asking prices rising in Barcelona faster than anywhere else in Spain, it’s a certainty that Colau will put rent controls at the centre of the debate for Barcelona’s elections.
Joan Clos, former Socialist Mayor of Barcelona and Minister for Industry in the Spanish government has also chipped with comments to Spanish radio saying that rents are rising in Barcelona “because there is not enough supply,” and that “getting rid of investment funds” is not the answer. He said he has reached out to Ada Colau on various occasions with no success, describing her as “very ideological” and uninterested in positive dialogue.
Barcelona rental market data
What does the data from Barcelona City Hall (Ajuntament) tell us about the rental market, and the impact of rent controls whilst they were in force? As you can see from the chart below, rents rose fast in 2022, having declined over the pandemic but also whilst rent controls were in force between September (Q3) 2020 and March (Q1) 2022, and then surged when rent controls were removed. You wouldn’t expect rents to decline under a rent-control regime, just not rise, unless the regime was keeping the best flats off the market. The decline was more likely due to the pandemic driving people away from the city. But it makes sense that rents exploded when rent controls were removed, especially with the pandemic receding into the background, and people returning to live in the city centre.
It follows that rents would not have risen had rent-controls stayed in place, so on that front Colau is right, but what about housing access? Did that improve thanks to rent controls? Not according to the next chart, which shows rental contracts declining sharply in the course of 2022. Detractors of rent-controls argue that they reduce the supply of homes for rent, which makes housing access worse.
Subscribers can see all the data and charts in the Barcelona rental market data page of the Data Hub.